Did SLA Ever Work?

[NoDoji]

I never studied the method; however, I did notice that places where his systems indicated entries were very similar to entries using my own method.

I draw lines on a 5-min chart connecting swing highs and lows because I trade off certain concepts, the main concepts being:

A) The initial break of a trend line in a well-defined trend fails more often than not (so I frequently "fade" the breakout and buy/sell in the direction of the trend).

B) If the trend is young, trend lines tend to hold up quite well for at least an attempt to revisit the previous high/low (so I look to enter in the direction of the trend)

With regard to B, I drill down to a 1-min chart to manage my entry, which may be via a stop order or a limit order.

I've never seriously studied how an SLA-type method would work on a 1-min chart exclusively. My trading buddy Jeff used to call the 1-min chart "The Devil's Chocolate" and that seems very apt to me.

 

[llIHeroic]

I gave my two cents in the last thread about DB, and I just happened upon this one while checking ET, so I will reiterate. DB was the first of several people who were very instrumental in my continuing development as a trader.

I've moved away from a lot of the specifics of his "methods", and for a short while I'd say there was a bit of friction in my brief interactions with him, but despite those things, I still have a sizable degree of respect for the man, and count myself fortunate to have first begun to delve into market theory with his materials rather than a lot of other places I could've happened upon.

I think a lot of people disparage DB for failing to live up to things he never even claimed to be true. He has presented a system called SLA, which he was quite up-front about as being insufficient in and of itself to generate profits, but can definitely suffice for a basic set of entry mechanics for a trader who has studied and tested enough to become comfortable with the nature of the market.

A lot of the new traders trying to learn or who have been failing for some time seem to spend an obsessive amount of time trying to understand perfect entry mechanics. Entry specifics are probably one of the least important components of a good trading procedure, in my opinion. More often than not I use a 1-2 tick BO from the end of the previous bar in the direction which I would like to have a trade on. Or, open a trade in my desired direction the next time a Doji of an active bar is passed in the same direction.

I don't have a hard time at all believing DB trades successfully, because he comes across as very comfortable with the market, and familiar with how it generally operates. Knowing when to even be looking to position yourself in a certain direction, and getting close to optimal exits for the movements that you're trying to capture are way more important than how to enter or where to put the stop.

Auction Market Theory is simply the frame-work he uses in order to answer those questions for himself. I use an entirely different paradigm to answer those questions for myself. You can present a framework for understanding the market, but the details of how exactly to partner with the market, make use of what is seen and can be understood, and design specific procedures for different common events will always be the sole responsibility of the individual.

Successful traders often find pleasure in sharing their understanding of the market, and encouraging people that are just starting out on paths they've already traveled. Learners should take what they have to say, keep what is useful, and discard what is not. Anyone expecting to be spoonfed intimate details on how successful traders do their work is likely going to end up disappointed.

 

[zdreg]

Just read where dbphoenix was banned at BMT earlier this month for allegedly being a vendor. The charge seems bogus because the alleged book he was accused of selling (at another trading site !) was never being sold at Big Mike's. Regardless, leading up to the banning were accusations that SLA was all hindsight analysis and didn't work in real-time.

I never got into the weeds of SLA because I'm one of those awful indicator people so I had my own homework to do. But superficially SLA struck me as potentially powerful. Was I wrong? Is there evidence backing the SLA approach? Please discuss.

the only acronyms I understand on this thread is bs and imo.
BMT, SLA Db?

 

[Autodidact]

I never studied the method; however, I did notice that places where his systems indicated entries were very similar to entries using my own method.

I draw lines on a 5-min chart connecting swing highs and lows because I trade off certain concepts, the main concepts being:

A) The initial break of a trend line in a well-defined trend fails more often than not (so I frequently "fade" the breakout and buy/sell in the direction of the trend).

B) If the trend is young, trend lines tend to hold up quite well for at least an attempt to revisit the previous high/low (so I look to enter in the direction of the trend)

With regard to B, I drill down to a 1-min chart to manage my entry, which may be via a stop order or a limit order.

I've never seriously studied how an SLA-type method would work on a 1-min chart exclusively. My trading buddy Jeff used to call the 1-min chart "The Devil's Chocolate" and that seems very apt to me.

Could have fooled me as you were quite supportive of DbPhoenix in the past; go figure.

 

[k p]

So I read your journal and noticed you were hanging off every word NoDoji and DBphoenix were telling you as if they were prophets.

Several people tried to help you out with details that were contradictory (but quite correct) to what the guru's were telling you.

However, you decided to shoot them down and were in fact fairly rude to them. Ghost_Of_Blotto comes to mind. There were a few others.

Now that you have come to the realisation that you were wrong and that you had no foundation or knowledge on which to criticise their help, are you going to apologise to them for your rudeness? Do you have the strength of character to admit to everyone that you were wrong in your beliefs in the guru's, you were wrong to insult the people who were trying to help you, and admit that you generally need help and will never progress with your current outlook and weakness of character?

Just asking.

So first I would like to point out that you've been on my radar ever since you made your first post because you started right away posting quite controversial stuff and yet have zero posting history. You therefore strike me as a person who has been here a long time, and yet you're hiding behind a different name, so this makes me question everything about you.

But I do want to address your questions since they are fair. I honestly don't feel like I was ever rude to anyone. Ghost of Blotto and I have had disagreements, but we have even PM'd in private and I think it was a great discussion. Just because we didn't agree doesn't mean we weren't civil. If I recall, he even made a few calls as well, which ended up being a profit for only 3 NQ points, even though it went against him 5 points or so as I pointed out, so this to me seemed like not much better, even though he was saying how ridiculous what I was doing is. The fact of the matter is that at the time, everybody who was jumping on me wasn't showing anything better. Guys who knock charts don't ever say how else they trade, so what they say doesn't end up being any more useful than the system they are knocking down.

I do still believe that price action works and there are other members here who use it that get much respect. There is simply no way for the major players to make price move without it being obvious. Of course it never moves in a straight line up or down, and the amateurs like me are often getting in too late and bailing at the slightest hint of trouble, but this is exactly what makes a market. The fact is, when there is lots of something to buy, it has to be bought in small chunks over hours or days, and so a price action trader is just trying to get on board.

Now if you want to scalp, for sure you can use a shit load of stats and reverse engineer almost what the algos are doing, and I see some members do this which is great. But just because they don't use price action doesn't mean it doesn't work. This is why I keep trying to seperate DbPhoenix from price action and even from his system. If you conclude the SLA system doesn't work, it doesn't mean Db doesn't know anything, and it also doesn't mean price action doesn't work. This is all I'm saying... all of these are mutually exclusive.

You end your post quite strongly by insinuating that I need to drop for my knees and beg for forgiveness which is a bit over the top. Yes I do see that on its own, the SLA system is just a simple starting point. I very much have doubts about certain elements about the DbPhoenix character, but as I point out, I haven't seen any proof from anyone else of how they are trading and what they are doing.

 

[k p]

Successful traders often find pleasure in sharing their understanding of the market, and encouraging people that are just starting out on paths they've already traveled. Learners should take what they have to say, keep what is useful, and discard what is not. Anyone expecting to be spoonfed intimate details on how successful traders do their work is likely going to end up disappointed.

I do agree with much of your post llIHeroic, and I still believe in the foundation of what Db teaches in that the market is an auction market and its all about supply and demand and that price shows you everything you need to know. I think the entry method is quite critical though because even if you're trading in the right direction, you can still lose lots of money. Using wide stops is hardly a way to overcome this as this will just kill you in the long run. If you're looking to short, and you wait till the market drops 15 points and short then, if it goes 5 or 6 points against your entry, this is enough to make you bail. It doesn't invalidate the trade, but it does certainly make you exit. So in this case, I think the entry is important.

But what I wanted to comment on more so was this last statement. I think that most successful traders actually don't want to share. Some of the best guys on here post not very often I'm finding out, or they post lots, but never about technique... they perhaps hang out in the P&R section. I honestly don't think that being spoonfed is something all that bad. We were all spoon fed as babies once. When it comes to trading, many of us are going into this completely blind. We all have so many issues that make it so difficult. It would actually be nice to see a bit of spoonfeeding... to see someone carry out their trades for a week on a few different types of trades and different days (ie. range bound days with reversals, trending days)... to show us where they enter, where they will bail, where they might re-enter, etc. This would actually build up a certain sense that this is possible. It will also convey the importance of discipline if we can see the trader sticks to their rules. The bits and pieces here and there I actually find to be a bit more damaging actually.

Now I understand that nobody is required to provide this, and this is the internet so there is no obligation for anything. But with all the people trying to help and give us what they think is helpful, wouldn't it be better to actually listen to what is being asked? So many of us want to see proof, and its a legitimate request.

I think if I was ever going to teach this, I'm not sure I would start with the top down approach where you learn about the market as a whole and you look at weekly and daily charts and all that jazz. Its important to know, but when you start out trading, even if ill-prepared, you're faced with putting on a trade at an exact price and either watching it go in your favor or against you. The fact that trading is just all about a series of trades makes me think that a new guy needs the experience of putting on a trade, having a small profit or loss right away, and then moving to the next trade without caring about the previous outcome. This will build proper trading mindset and get you on the right path. This is a foundation of trading. A baby doesn't need to know about nutritional content of food nor anything about how to prepare it... he just learns how to chew and to follow the spoon going into his mouth. If you try and teach the kid about nutrition and teach him how to cook, he will die before he reaches the point of this understanding. Likewise, for a trader, if he waits to trade before he understands the whole market, something that can take years upon years, he might quit before he even starts by getting turned off or frustrated. This is more of a bottom up approach as opposed to top down which is my opinion would be the better way to learn trading.

 

[kut2k2]

the only acronyms I understand on this thread is bs and imo.
BMT, SLA Db?

DB should be obvious. BMT = Big Mike Trading, another trading forum.

SLA = Straight Line Approach, dbphoenix's take-off on the Wyckoff trading method. DB wrote a series of threads in the Journals section entitled "If you can draw a straight line ..." (then you can learn to trade.) The first ones were mangled by the site upgrade last year (SLA is a chartist method and the necessary thread attachments were destroyed) but he wrote at least one post-upgrade which is intact if you wish to read it. I believe it is "House of IYCDASL"

 

[nth]

Just read where dbphoenix was banned at BMT earlier this month for allegedly being a vendor. The charge seems bogus because the alleged book he was accused of selling (at another trading site !) was never being sold at Big Mike's. Regardless, leading up to the banning were accusations that SLA was all hindsight analysis and didn't work in real-time.

I never got into the weeds of SLA because I'm one of those awful indicator people so I had my own homework to do. But superficially SLA struck me as potentially powerful. Was I wrong? Is there evidence backing the SLA approach? Please discuss.

I don't know whether SLA "works" or not. It is hard to say what it even is. I think I recall him once saying that it wasn't a complete system but rather a template/model?? I did, however, like that he encouraged people to test for themselves. I was once curious on the validity/reliability of what he was saying. So, I asked him about automating it. At the time he said that it was not possible. This concerned me. And, thus I lost any curiosity. Then later I saw him make mentions of backtesting.

It's naive to think that anyone is going to handout an "edge". The true "edge" (aside from the structural) is experience. And, that can't be transferred.

What we do know is that the handle by the name of Speculate that is messaging at the rate of 80+ messages per month out of the gate.. is likely not a DB reincarnate..

 

[Ditch]

And how exactly does this post add anything useful to this thread???

I do respect you Ditch cause I can tell you're a real guy from what you post, so I'll give you that.... but you ain't helping too much here.

And because I'm a real guy too.. I'm going out for brunch. Hmmm... will there be anything useful posted while I'm gone???

When are you going to realize this SLA has no edge? Basically this method was originally nothing more than entering on pullbacks in a trend. There's more than enough research on this method available, it only provides a slight edge, which leaves no room for error. How long have you been at it now and how much did you lose using it?

 

[i960]

I don't get what's so controversial about SLA. It's just trading levels and there's nothing wrong with that. Perhaps the problems people have is they trade in areas that they simply shouldn't be trading in.

I don't use SLA specifically but no doubt some of my own approach has some overlap.